Have you carefully read and analyzed the terms and conditions of the promissory note (and/or details provided on a lender's Web site)? Student loan marketing materials sometimes omit critical details about the loan terms that may make the terms seem more attractive.
What interest rate is offered for the loan?
Is the same rate offered for the in-school, grace period, and repayment period?
Are there special conditions that a student must meet to receive, and continue receiving, this interest rate? If yes, are these conditions reasonable?
Does the lender require a student to make Satisfactory Academic Progress (2.0 g.p.a. or completion rate –no excessive withdrawals within recent terms)?
Does the lender require me to attend and maintain half time enrollment (6 hours for undergraduate and 5 hours for graduate level)?
Does the lender require me to be admitted and in good standing in a degree-seeking program?
Does the lender allow loans for prior term payments (bills due to my school that I must pay before enrolling next term)?
If the student consolidates the loan, does the student still receive any interest rate benefit?
What types of fees are charged by the lender (i.e. origination and/or insurance fees)? How much are these fees?
Does the lender waive any fees or pay them on the borrower's behalf?
Are there conditions that a student must meet to receive the benefit of waived or paid fees? If yes, are these conditions reasonable?
Does the lender offer other distinctive benefits, such as interest rate reductions for making a certain number of on-time payments and/or authorizing automatic payments from a borrower's checking or savings account?
What special conditions must a borrower meet in order to receive these benefits? Are these conditions reasonable?
Are combined billing options offered if a student borrows a Stafford and an alternative loan?
How do the terms and conditions being offered by one lender compare with the terms and conditions being offered by other lenders?
Prepared by National Association of Student Financial Aid Administrators